I have a customer that is also a vendor at times. He owes me on an invoice (AR), and now I owe him an amount (AP). Is it possible to somehow apply/deduct the amount he owes me from the amount I owe him, then just pay him the balance? Really not sure how to even explain this.
Example: he owes me $2,000. I owe him $4,000. Can I apply the $2,000 he owes me as a payment toward the $4,000, then send him the remaining $2,000? Is there a way to record this to keep records straight and mark invoices paid correctly?